Why Does Perfect Competition Guarantee a Pareto Optimal Distribution of Goods

question 88

Multiple Choice

Why does perfect competition guarantee a Pareto optimal distribution of goods between two people? Under perfect competition,

• A) everyone has the same preferences.
• B) everyone faces the same prices.
• C) everyone consumes the same quantity of both goods.
• D) goods are homogeneous.

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Definitions:

Full-time Work

Employment in which an individual works a minimum number of hours defined as such by their employer, typically involving a commitment of 35-40 hours per week.

Phased Retirement

An arrangement that allows employees to reduce their hours and/or responsibilities in order to ease into retirement.

Complete Cessation

A term referring to the total ending or discontinuation of a behavior or process.

Reduced Working Hours

A labor policy or arrangement where the standard number of hours worked by employees is decreased without a significant reduction in pay, aimed at improving work-life balance.